>> |
03/04/12(Sun)08:12 No.1946582>>1946522 The
USA is 'dependent' on foreigners to cover its trade deficit, which is
propping up consumption artificially. If that went away consumption
would have to fall noticeably.
And nobody is worried that the US
will *default*, but rather that it will let inflation pick up, which
means that its bonds would produce a negative return.
In the end
all this would be for the good: US consumption would decline to
sustainable levels, there'd be more employment in the US (just at lower
wages), and China, etc. would have to start consuming more and exporting
less. China etc. would be left holding the bag for a lot of US's
borrowing (since they would have lent to the US with the dollar worth x,
so the US could buy imported Chinese goods worth x, but will be repaid
in much depreciated future dollars), but it's a risk they knew they were
running. |